By Mardi Kari

In home purchase transactions, there are many times when the buyer and the seller are simply unable to agree upon a specified closing date. The Real Estate Agent involved can negotiate a ‘rent back’ period that is agreeable to both parties. This means the transaction technically closes, the loan for mortgage financing is funded, and ownership of the property is transferred into the buyer’s name. However, the buyer does not take occupancy of the property until several days later. Instead, the buyer sets up a rental agreement in which the property is leased back to the seller for a temporary period that everyone has agreed upon.

While this strategy is fairly common, it is important to make sure the seller is not occupying the property in a lease agreement for more than 30 days* after the close of the purchase transaction. This would constitute a big problem for the new homeowner. After 30 days, the lender would view this as a non-owner occupied purchase, and it would cause the terms of the loan to change radically.

Courtesy of Arcstone Financial

I heard a great discussion about the state of the market recently, and wanted to post this here for all to see. This is especially important if you are selling, or thinking of selling your home. The point of said discussion was very simple; About 70% of homes currently for sale are overpriced, and the remaining  30% are priced correctly, and therefore fetch multiple offers. How do we know this? In the month of October alone, for the areas of West Hollywood. Miracle Mile-Beverly Center, Hollywood Hills , Hancock Park & Beverly Hills, 48% of listings expired , which means they are unsold. This doesn’t even count the hundreds of listings that were withdrawn from the market. So, chances are, the the 70/30 ratio probably isn’t that far off the mark. I realize that there is a debate on whether or not the current wave of Foreclosures and Short Sales will make it’s way over to the West Side or not. If it does happen, it can only increase inventory, which underscores the importance of a homeowner to sell at a price which reflects current market conditions. People who are listing homes at unreasonable prices are just compounding the problem at this point. We should all remember when gasoline was rationed in the 70’s and adopt a similar mindset to the current oversupply of homes for sale; if you really need to sell, have a realistic outlook about the value of your home. Attempting to justify a high selling price in this market just because you were offered a similar amount of money back in 2005 is like arguing with your Stock Broker that your stock used to be worth xx dollars/share. Markets are not static. They fluctuate on a daily basis.

Yes, it’s true. This is a top floor unit, approx 360 sq. ft., new paint, carpet, granite. It is located at 525 S. Ardmore Ave. #324 in the Hancock Park-Wilshire section of Los Angeles. Listed at $179,000 it is easily one of the most affordable condos in a good neighborhood here in L.A.